We all know the story of Apple, particularly those of us who have been in the technology business for a while. Apple had been declared dead at least twice, the first when IBM took the PC market from them, and the second when Microsoft copied the Macintosh interface to make Windows. Both times the cause was attributed to Apple’s penchant to stay proprietary, and their competitors pushed an open system. But the third time, the iPhase, Apple opened up the kimono, and let other players write to their systems. Thus they altered their trend in a positive manner.
Merkin’s Maxim reads, “When in doubt, predict that the present trend will continue.” Whether it is in life or business, we would always like the trend to be better. The key of course is to learn from your past, and apply corrective measures to present and future actions.
In the business world it is said that good people are a company’s best asset, yet it is rare that companies apply business type formulas to managing their workforce. Too often, they will add or make cuts to adapt the budget. But, there is not the same type of forecasting of company and market conditions that affect whether people join, stay, or leave an organization, as there is in sales and finance.
What can we learn from recent history?
According to a report published near the beginning of the 2008 recession, only about a third of HR departments said they were consulted on company decisions about which people to let go. That’s a stunning lack of influence in an area where HR has the most expertise of any function. Things have improved, but the majority of HR leaders still don’t possess the data or influence to gain impact on financial decisions.
As I wrote in a previous blog, metrics are a snapshot in time; they tell you where you are today. When you trend metrics, it describes the journey of how you got to where you are. Thus taking Merkin’s Maxim to heart, if cost to hire people is increasing, performance scores are going down, and turnover is on the rise; you have to do something, or you are going out of business. You have to find a way to alter the trend.
Alter the trend. Good solution, but how?
The first step would be to try and associate the trend with key events at the company or with the business. Did you change staffing providers near the time hiring costs started to rise? Was a new general manager hired three months before performance starting declining? Or, was a benefits plan with less coverage implemented at the beginning of the year right as turnover started rise? Just seeing these events in the same view with workforce trends might provide keys to why the trend is heading in certain direction.
The next step is to find what changeable metrics have the most effect in driving up the business. According to a 2016 CareerBuilder study, 76 percent of full-time, employed workers are either actively looking for a job or open to new opportunities. What are the best ways to keep your top people, and attract your competitors 76%? If investing in compensation, training, or a new search firm can have a triple digit return, it’s likely most companies would spend the money.
The final step, once you have identified the factors affecting your trends, is to find the expertise and tools to model out scenarios whereby you alter or undue events, invest new resources, or change practices to see if the results are worth it. Employing a data scientist can help, but also having predictive people analytics software can be invaluable in this endeavor.
Now it’s your turn.
So, don’t let all of the information in your HRIS and other systems go to waste. Use your historical data to make better people decisions today, and maybe you’ll have a growth curve like Apple tomorrow.